Staff Report
City Council
Item No. 2.B
Meeting Date: May 27, 2026
From: Sandra Molina, Community and Economic Development Director Title: A Report on Affordable Housing and a Presentation by Community Housing Opportunities Corporation (CHOC).
RECOMMENDATION:
Accept the report and provide direction to the new Community and Economic Director to create and implement a work plan to further the development of affordable housing and receive a presentation by Community Housing Opportunities Corporation (CHOC).
BACKGROUND:
On March 25, 2026, the City Council received the 2025 Housing Element Annual Progress Report (APR). The APR is a snapshot of the City’s progress in implementing its certified 2021-2029 Housing Element. The APR agenda report and presentation included a discussion of:
Progress in housing production in relation to the City’s RHNA Progress in implementing Housing Element Programs
Facilitating and incentivizing affordable housing production through the oPro-housing designation
oDevelopment Code Update (DCU)
The City Council continued to be supportive of seeking the Pro-housing designation and utilizing the Development Code update to facilitate housing production and also directed staff to contact other cities such as Rancho Mirage and Palm Desert to see if there are any best practice takeaways the City could learn from.
DISCUSSION:
Rancho Mirage
Rancho Mirage is producing over 760 dwelling units affordable to low- and lower-income households. These units are being built over four sites, located in a High Resource Area as designated by the California Tax Credit Allocation Committee (TCAC) on the State Opportunity and Neighborhood Maps. The properties were City-owned and sold to affordable housing (AH) developers, selected through the RFQ/RFP, with subsequent Disposition and Development Agreements (DDA) and entitlements. Affordability is guaranteed through 55- year covenants.
The process included Council support, in part, to ensure local control of housing development within their City. Rancho Mirage utilized different tools to facilitate the affordable housing project, with the tools tailored to the individual project. There was also urgency in completing the DDAs, due to pending state re-designation of the High Resource Opportunity area, and they were drafted, reviewed and adopted within 3 months.
Below are the tools that were utilized:
RFQ/RFP – to properly vet and select the right proposer Use of city-owned land
High resource opportunity area
Transfer of city property to the Housing Authority – avoided the Surplus Land Act requirements
Sale of one property at substantially reduced rate ($1) Sale of properties at fair market value with City providing a residual loan Financial assistance in the form of waived, deferred or residual loan of filing fees, development impact fees, permit fees, community facilities district assessments Residual loans did not trigger prevailing wage
CVAG waived TUMF
Key takeaways: City alignment from decision makers to staff, location in high resource area, residual loans that limit prevailing wage requirements, and transfer of property to housing authority negates the SLA.
Palm Desert
Palm Desert is producing over 1,300 affordable housing units. The housing is being built on private land in addition to City-sold properties. City properties have been sold at fair market value. Very minimal cash financial assistance is provided and when it is, it is used sparingly, as is the reduction or waiver of city fees.
They stress the importance of geography and land positioning and that they have benefited from being centrally located within the Coachella Valley. The majority of affordable housing is being constructed in proximity to the I-10 Freeway, which they also attribute to the availability of large parcels of vacant land and flexible zoning standards. Much of this area is also in a high resource opportunity area.
They have found greater success with housing on properties over 5 acres, with the greater success on sites over 10 acres. These larger sites allow the City to make more meaningful progress toward RHNA obligations, particularly when compared to the effort required to deliver smaller projects. Prevailing wage has not been problematic, for these larger projects.
Affordable housing developers mostly applied for LIHTC funding.
They also focused on targeting low- and extremely low-income units as a priority, aligning their efforts with funding opportunities and RHNA needs. They emphasized the importance of partnering with experienced housing developers who have a proven track record of completing projects within the Coachella Valley, which helps reduce risk and improve execution timelines. They highlighted the Millennium project (mixed income development) as well as Arc Village, in collaboration with Desert Arc and designed in part to provide housing opportunities for their workforce. These projects reflect the scale, partnerships, and targeted outcomes that have contributed to their success.
Below are the tools that were utilized:
Streamlining of project approvals
Provided cash assistance in limited circumstances
Waived fees in limited circumstances
Key takeaways: City alignment from decision makers to staff, strongest outcomes on sites exceeding 10 acres to make more meaningful progress towards RHNA, all City departments were aligned in processing the projects, their model reinforces the importance of land strategy, internal alignment, experienced partnerships, and disciplined financial planning in successfully advancing affordable housing.
Both Rancho Mirage and Palm Desert reinforced the importance of land strategy, internal alignment, experienced partnerships, and disciplined financial planning in successfully advancing affordable housing.
Lift to Rise
Staff also met with Lift to Rise. They stressed the importance of location, including high resource areas and proximity to services. This is especially important due to the competitive nature of Low-Income Housing Tax Credits (LIHTC). A site located in a high resource area and in proximity to services garners extra points. Additionally, assistance with soft costs, such as financial assistance with permitting costs or loans, will also score extra points.
They also advised that the City consider multiple grant funding sources, not just housing grants, that may be applicable to a project. For instance, dual uses on a site could potentially qualify for multiple grants related to housing, climate or adaptive re-use.
Pro-housing Designation Program/Development Code Update The Pro-housing Program is a certification awarded to jurisdictions that demonstrate a proactive approach to accelerating housing production within 4 categories. The categories are listed below along with examples on how the category can be achieved. Favorable zoning and land use
Acceleration of housing production timeframes
Reduction of construction and development costs
Providing financial subsidies
The ongoing Development Code Update provides an opportunity to translate the Housing Element programs into actionable policies and development standards that more directly influence housing outcomes. Targeted incentives that are specifically tied to housing development, particularly for projects that include units affordable to lower-income households, can provide flexibility for developers, advance Housing Element objectives, and support the City’s application for Pro-housing Designation.
While the Development Code Update is ongoing, the City has an opportunity to establish programs that align with the criteria evaluated under the State’s Pro-housing Designation, advance implementation of Housing Element programs, and ultimately facilitate the production of housing affordable to a range of income levels, as required by the RHNA allocation. Housing Element programs that call for facilitating housing development could be implemented through Development Code standards.
Grant Opportunities
Staff has explored grant opportunities that support affordable housing development, including the Affordable Housing and Sustainable Communities (AHSC) grant. The purpose of the AHSC grant is to support the development of affordable housing and sustainable transportation projects in California with the aims to reduce greenhouse gas emissions by funding compact affordable housing in conjunction with sustainable transportation improvements. It provides funding for affordable housing development and related infrastructure, as well as transportation-related amenities, and programs that encourage residents to walk, bike, and use transit.
At the Lift to Rise Strategic Planning session, staff was introduced to Felicano Vera, Vice President for Real Estate Finance at Community Housing Opportunities Corporation (CHOC), who expressed interest in developing in Cathedral City. CHOC has partnered with several community partners to develop, finance, and build affordable housing. Recent housing developments in the Coachella Valley include Placita Dolores Huerta in Coachella and Monarch Apartments in Palm Springs.
Staff met with CHOC’s development team and during the process discussed opportunities to apply for AHSC along with analyzing privately owned properties for housing development.
CHOC’s team analyzed a 1.61 acre city-owned site, located at the eastern portion of the intersection of Buddy Rogers and Date Palm Drive. This exercise was done to provide feedback regarding the AHSC grant. One key takeaway from this exercise was the importance of site control for developers, as this allows for both flexibility but also opportunity to partner on grants that positively impact the community. Ultimately, staff did not pursue the grant at this time due to a variety of sites and submittal timing constraints.
Community Housing Opportunities Corporation (CHOC)
Through the analysis of the AHSC Grant application, CHOC compiled a comprehensive analysis of development opportunities in the vicinity of downtown, due to the importance of site control provided by City-owned parcels. This includes alternative financing mechanisms that do not fully rely on TCAC designations which can also be an issue when analyzing long term financing.
CHOC sees the downtown area holistically, the East Palm Corridor, City Hall, Agua Caliente Casino, Cathedral Cove Commercial Center, The Grove Apartment and the Cathedral Cove area and the proximity to services. They reimagined the downtown area by envisioning master planning that looks at various housing typologies affordable to various household income levels, mixed use, and feathering of density to connect to Cathedral Cove single family residential areas.
CHOC has prepared a presentation on the opportunities and constraints of affordable housing financing, and the roles cities play in housing development. In the study session, they intend to present some ideas and opportunities for Cathedral City to consider in reimagining the downtown in ways that align with the strategic plan goals and to make progress towards meeting the City’s RHNA goals. A draft of their presentation is attached.
FISCAL IMPACT:
Some of the proposed programs such as the waiving of filing and development impact fees will have a fiscal impact. However, as these tools would be used on a case-by-case basis and would be evaluated at the time a project was being considered.
FIVE-YEAR STRATEGIC PLAN:
GOAL F – EMBRACING, INCLUSIVE COMMUNITY
Objective: Cathedral City is valued and respected as a community that welcomes and embraces diversity, has an abundance of high quality and affordable housing options and vibrant businesses. Our neighborhoods are attractive, well-maintained, and issues surrounding homelessness have been compassionately addressed with thoughtful, coordinated, and collaborative programs.
ATTACHMENTS:
1. TCAC Opportunity Map for Cathedral City
2. Draft CHOC Presentation - “Leveraging RHNA Requirements for a Vibrant Downtown Cathedral City”